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Comment by pleasecalllater | Hacker News Reader

I hope it's a joke, or something is missing there. I try to save as much as possible and I barely spend 25% of my income. Forcing me to spend more is not right.

Maybe they were rather thinking about: move your money electronically, which would also include getting salary on a bank account, or wiring it there.

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If I understand it, the point is to avoid cash transactions that cannot be taxed. One article I read pointed out that the 30% would include rent or mortgage payments, utility bills, and such things.

Personally, I would find it easy to hit almost 100% of the transactions I make electronically - I use cash rarely now (living in France, no cash tips etc.).

I think I would struggle to only spend 25% of my income, though. Even if I am saving a lot, once I pay rent, family groceries, utilities, phone and internet, I’d be past that. If you don’t mind to share, how do you manage to spend so little of your income? There’s always room for me to save more, and I’d love a couple of tips.

He is probably well paid. I agree it’s hard to keep the expenses below 25% of income.

I'm guessing single person willing to live frugally, working in high paid tech job. That, or using different definitions and not literally saving 75% of take-home pay.

It's trivial. You just need to earn 4 times your minimum spend and then do it. ;)

Allow me to explain better.

The 30% comes before any tax. Also it does not include payments for taxes, rent and other things.

So, let's say I make €40K/year. My tax will be about €11K. Further taxes, such as owning some property, owning a car, can add €1-3K more. My rent may be €7K.

So now, I have already spent ~€20K but this does not count towards this limit. I still have to spent €12K on various things (food, services, goods, which come with 24% VAT in Greece) or I get an additional 22% tax.

It's madness!

The article says that payments for rent do count towards the limit. Can you re-confirm?

I can. Rent does not count towards spending but it counts towards... earning.

So, if you own a house and rent it to others, the rent is part of your income. If you rent a house to leave in, the rent is not part of your spent amount.

There is a special clause, that if you spent more than 60% towards tax, rent and loan payments, then you only have to spent 20% of your income on services, goods, etc.

The article explicitly includes rent: "Greeks can use debit cards, credit cards, bank transfers and ecommerce for the electronic transactions, which includes rent."

There is a global 'war on cash' by the finance lobby because they can easily insert fees on every electronic transaction, while at the same time hyper-virtualise their operations.

Lose all those branch offices and ATM's that need to be maintained and supplied. Just have a computer, a banking app and some AI bots and you can do it all with near zero cost and rentseek the hell on every single transaction for the 99%.

Tell the public sector it is all in the name of combating 'tax-evasion', you know, the evasions you make possible by lobbying for very convoluted taxation regimes with many always changing backdoors you are advising your 1% clientele on.

Do you really think maintaining infrastructure for electronic payments and internet banking is "near-zero cost"?

Compared to traditional banking real-estate, employees, physical operations and security ... yes.

"Near-zero“, really?

The way I see it is that the government wants Greek nationals to use electronic payments for at least 30% of their expenses, to aid tracking.

This does NOT mean the government wants Greek nationals to spend at least 30% of their income.

This is exactly what it wants. 30% before any tax, without counting rent, etc must be spent or you face 22% tax on the unspent amount. :)

> The way I see it is that the government wants Greek nationals to use electronic payments for at least 30% of their expenses

That does not compute. How does one prove that 30% of their expenses were done using electronic payments? Submitting paper receipts for the other 70%? It's been tried and it's unfeasible.

I do believe that if you put the rest of your income in a saving account, or investment it is counted as spending it.

Become it is not income anymore but an asset.

Then you must be pretty rich. A lot of Americans spend 25% of their income on housing alone.

> Then you must be pretty rich.

Not at all!

If you own a house or rent a tiny apartment and live frugally you can do that with a middle-class income.

Owning a house probably makes you pretty rich in the eyes of many people.

if you own a house you are rich.

70% of Americans own their own home. Are 70% of Americans rich?

I would expect 70% might have a mortgage but owning - as in not having to pay the mortgage because you own the home entirely - would be well under 70%.

If you’re under 35 and own your home outright you’re either rich or your parents are.

No, 70% live in a non-rented home (an adult son living in their parent's home is also counted, for example). Also, only 34% are fully paid off.

Err, are you saying 70% own their own home (i.e., no mortgage) or 70% live in a house which some percentage >0 and <90% is owned by the bank?

There's kind of a big difference there...

You don’t own the house until you’ve paid off your mortgage. If you’re doing that under 50, you’re probably pretty decently well off. And also if it’s actually you who owns the house and not your sibling or parents who you’re living with.

If you prepay all your expenses you can live on $0 a month... That's not a very useful argument.

If you live in eastern/southern Europe, it's very easy (and pretty normal) as a software engineer. I spend less than 20% of my salary, because the cost of living here in Prague is appropriate for people making $17k yearly (before tax), while I am making a typical SW engineer wage you'd find in an average town in the USA or western EU (~$90k yearly before tax).

Do you work for a local or remote company, if you don't mind me asking?

Local foreign-invested startup at the moment

Thanks, that's amazing, and depressing (for me).

You must be bringing something unique and very senior to the table, or company is overpaying you maybe 2x of what it would take to get a great local SW engineer. I know there is long term shortage of senior folks there, but it shouldn't be that desperate.

Plus you mention before tax, so unless you are contracting (which is probable but no real clue), you are left with much less after taxation, being in very high tax bracket. So the numbers posted don't work anymore, unless you live very frugally in crappy tiny apartment/room (or riding family wealth).

I worked there 10 years ago, so maybe things changed dramatically. Its true they still keep pestering me in linkedin, so maybe it did change so much. Anyway, Prague is great place to visit, but I found it rather bleak for long term living and raising family, especially when compared with other places located more west. There is only so much you can buy with money within given society.

There are no tax brackets in Czechia. Tax is flat 17% + social and health insurance. That wage is now completely ordinary for average senior developer.

Things in Prague indeed did change dramatically in the past 10 years, especially during the last 5, the Prague IT market grew several tens of percent a year during that time. Right now Czechia has the lowest unemployment rate in Europe, and looking for a good developer indeed is very desperate (I am responsible for hiring from my position - which I hate to do, because it's nearly impossible).

Culturally, I think you should try Prague for a month or two again. The city did change a lot, including a large influx of new people (several hundreds of thousands in the past 10 years have immigrated into Prague).

I remember Prague of 10 years ago (I was born in a smaller city in Czechia) and it was a place I did not like. Today's Prague is awesome.

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